Northern Territory Second Reading Speeches

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JUSTICE LEGISLATION AMENDMENT (SMALL CLAIMS AND OTHER MATTERS) BILL 2015

Madam Speaker, I move that the bills be now read a second time.

The purpose of these bills is to:


transfer the small claims jurisdiction from Local Court to the Northern Territory Civil and Administrative Tribunal, NTCAT

provide that small claims must be commenced in the NTCAT

increase the jurisdictional limit of small claims from $10 000 to $25 000

provide that within the small claims jurisdiction legal representation is only to be provided with approval of NTCAT

make amendments to facilitate the transfer of the small claims jurisdiction from the Local Court to NTCAT.

The bills also streamline the determination of disputes and establish the NTCAT as the one stop shop for disputes under the
Cullen Bay Marina Act and the Unit Title Schemes Act and the Unit Titles Act.

Territorians deserve fast, fair and cost-effective justice. The government has a duty to ensure our justice system is as streamlined, efficient and accessible as possible, which is why the government established the NTCAT back in 2014. I have consulted with the public, legal profession and judiciary in relation to these reforms. The incorporation of the small claims jurisdiction of the Local Court into NTCAT provides the possibility of enhancing access to justice for minor civil matters.


Currently, small claims matters vie for priority with more substantial criminal and other matters before the Local Court. Conferral of the jurisdiction on NTCAT will provide the public with access to a participatory based low-cost, less formal, less adversarial, more accessible dispute resolution mechanism. The small claims jurisdiction is an accepted and commonly used jurisdiction for the general public. In 2014-15 there were over 1600 small claims applications made in the Local Court.


It is anticipated that the improvements in the workability of the small claims jurisdiction that these bills facilitate will have a beneficial impact on community perceptions around the effectiveness of the justice system more generally, and the unburdening of court resources by reducing the workload of the higher courts.


The
Small Claims Act commenced on 2 July 1976, with a jurisdictional limit of $1000. The limit was amended on three occasions – in 1982 to $2000, in 1989 to $5000 and it was last amended 13 years ago to $10 000 in 1998. The current low monetary threshold of the small claims jurisdiction disadvantages business and is inadequate for the current economic climate. By having the limit set so low it forces businesses and individuals to take disputes over minor claims - where more than $10 000 - to the general civil division of the Local Court. This is often a significantly more expensive and time consuming process for our businesses and individuals. Quite often the costs outweigh the worth of the original dispute, meaning it is not worth the time, effort or money needed to effect justice in this area.

Small business owners and independent contractors are currently at a significant disadvantage when having to pursue outstanding unpaid debts. This can have a significant impact on their cash flows and the financial viability of their businesses. This disadvantages the business community in the Northern Territory and deprives them of a cost-effective justice system they would be able to achieve in a number of other jurisdictions around the country. This is particularly problematic for small businesses that may not bother taking disputes to court because it is ‘simply not worth it’.


It should also be noted that in a 2014 public consultation process, undertaken by the Department of the Attorney-General and Justice, showed a broad support for increasing the current jurisdictional limit under the
Small Claims Act. Clause 5 of the Small Claims Bill 2015 therefore provides that a small claims limit for matters to be heard within the small claims jurisdiction of NTCAT is to be $25 000. Such an amount (or value of the claim) is to be determined exclusive of any costs or interests that might be awarded by the NTCAT. By raising the limit from $10 000 to $25 000 we will allow more small businesses, family businesses and individuals to achieve justice and cut down on the backlog in the general division of the Local Court. As the increase in the monetary limit will allow more small claims to fall within the ambit of small claims disputes, it will give parties the benefit of less formal procedure of the small claims jurisdiction.

What is a small claim? The current
Small Claims Act creates the small claims jurisdiction in the Northern Territory within the jurisdiction of the Local Court. Under the Small Claims Act the Local Court currently dispenses with the rules of evidence when it exercises the small claims jurisdiction. Section 5 of the current Small Claims Act provides that a claim not exceeding $10 000 may be instituted by a Local Court under the Small Claims Act. The subject matter jurisdiction conferred under section 5 is currently limited to the recovery of amounts of money, performance of work of a particular value, relief from payment of money and return or replacement of goods. Section 5 is not designed to cover other matters that are arguably involved more complex legal principles.

However, provisions of the current
Local Court Act operate to modify the effect of section 5 of the Small Claims Act. Section 14(1) of the Local Court Act provides the Local Court has a broad jurisdiction to hear and determine matters not exceeding $100 000, being a cause of action for damages (which includes an action in tort) or a debt or liquidated demand, a claim for equitable relief, or a claim concerning the right to ownership or possession of property.

Section 14(7) of the
Local Court Act provides that any type of claim under the value of $5000 must be commenced under the Small Claims Act. Proceedings between $5000 and $10 000 can be commenced either under the Small Claims Act or the Local Court Act. Accordingly, current proceedings for claims between $5000 and $10 000 can be commenced either under the Local Court Act or the Small Claims Act. The way in which both the Small Claims Act and the Local Court Act operate also means that in practice, in relation to matters under $5000, the types of claims which may be determined as ‘small claims’ also include a broader range of claims, for example, equitable relief and damages.

Clause 6 of the Small Claims Bill 2015 establishes the small claims jurisdiction of the NTCAT. After consultation with the Chief Justice, Chief Magistrate and the President of NTCAT, it was decided to transfer the jurisdiction to NTCAT over only those matters specifically enumerated in section 5 of the existing
Small Claims Act, for example, actions for debt recovery and liquidated relief. These types of minor civil matters lend themselves to the body hearing them, informing itself in any way it considers appropriate, and to act with as little formality and technicality as necessary. It is more appropriate that such a jurisdiction be vested in a tribunal which may determine matters in a more ‘inquisitorial’ as opposed to ‘adversarial’ fashion. On the other hand, the jurisdiction to determine claims, for example in relation to equitable relief and damages, will remain with the Local Court. The jurisdiction proposed to be retained by the Local Court is conducive to being dealt with according to the rules of evidence. Further, it is anticipated that the jurisdiction to be retained by the Local Court is unlikely to amount to a significant number of matters.

What the bill essentially does is ensure that all small claims matters are commenced in the NTCAT. However, there are appropriate exceptions being built into the process to ensure that legislative changes operate in a user-friendly and effective manner, for example, to allow a larger claim with a small claim component to be commenced in a more appropriate court.


The current
Local Court Act the new (yet to be commenced) Local Court Act 2015, as well as the proposed Small Claims Act 2015, define a ‘claim’ as including a cause of action. Reliance upon the word ‘claim’ in the bills is intentional. This is because it is the claim, viewed as a whole, which is determinative of what is the most appropriate forum to hear and determine a dispute. For example, when a claim has a small claims element but also comprises subject matter within the original civil jurisdiction of the local court, under these changes the local court will have original jurisdiction to deal with all matters including the small claims component before it. These matters will be discussed in more detail when I turn to the Justice Legislation Amendment (Small Claims and Other Matters) Bill 2015 .

As for representation: Clause 7 of the Small Claims Bill 2015 provides for representation (by a legal practitioner) in the small claims jurisdiction only by leave of NTCAT. This is in contrast to the current position. Currently, rule 4.06 of the Small Claims Rules provide that anything that can be done by a party may be done by the party’s legal practitioner or with leave of the court by some other person. The small claims jurisdiction is intended to provide people, many of whom could not afford representation with cheap and expeditious access to justice which may otherwise be beyond their means. It is designed to encourage and support more people in commencing proceedings within the jurisdiction.


By having people represent themselves instead of lawyers representing them I believe it will be a more cost effective and fairer way of resolving small claims disputes. It may result in more equitable outcomes than was previously the case, for example, where one party does not have the means to engage a lawyer and has commenced proceedings or is defending proceedings against a well-resourced litigant with representation.


It also brings the Northern Territory into line with a number of other jurisdictions that prohibit, subject to limited expectations, a lawyer or representative from acting for a party in a similar small claims type jurisdiction.


I now turn to the Justice Legislation Amendment (Small Claims and Other Matters) Bill 2015.


The Justice Legislation Amendment (Small Claims and Other Matters) Bill 2015, the Justice Legislation Bill amends various acts consequential to these reforms to the Small Claims Jurisdiction and the conferral of that jurisdiction upon the NTCAT. It also amends a number of NTCAT-related acts, for example, to improve consistency across the Northern Territory’s
Unit Titles Schemes Acts.

The amendments to the
Local Court Act, the Supreme Court Act and the Northern Territory Civil and Administrative Tribunal Act in the Justice Legislation Amendment (Small Claims and Other Matters) Bill 2015 include transfer provisions that apply to all matters before the NTCAT. These new transfer provisions will not be limited to small claims matters only. While Section 99 of the Northern Territory Civil and Administrative Tribunal Act enables the NTCAT to strike out a proceeding or part of a proceeding if it can more appropriately be dealt with by another forum. The act currently does nothing to facilitate the transfer of proceedings to another forum if that other forum does not have jurisdiction to deal with the matter in the first instance. Such a provision was considered necessary to address circumstances where a matter is too complex for a tribunal and would be more appropriately dealt with by a court.

It was also necessary to accommodate those circumstances where the small claims or other tribunal matter relates to a larger claim in the local court or Supreme Court, and it would be appropriate that these matters be dealt with at the same time. Accordingly Clause 24 of the Justice Legislation Amendment (Small Claims and Other Matters) Bill 2015 inserts a new section 99A into the
Northern Territory Civil and Administrative Tribunal Act.

This clause makes provision for a proceeding before the NTCAT to be transferred to the Local Court or Supreme Court where the matter is not within NTCAT’s jurisdiction or, because of circumstances of the case, the proceeding would be more appropriately heard by a court.


The new section 14A of the current
Local Court Act 1989 and then when it comes into operation later in 2016 section 13A of the Local Court Act 2015 will clarify the jurisdiction of the local court in relation to small claims matters, that is, that the Local Court can only deal with small claims matters that have been transferred to it by the NTCAT or where the claims are a mixed small claims/Local Court matter. The amending provisions will accommodate the situation where, for example, the claim has been commenced in the Local Court which involves equitable relief or damages, but the same factual matrix also gives rise to a small claim. In these circumstances, the amendments will allow the whole claim to be commenced in the Local Court and heard together.

These new provisions also clarify that in these cases the law conferring the relevant small claims jurisdiction on NTCAT is to be read as applying to the Local Court. A similar provision is being inserted into the
Supreme Court Act at section 16A. However, as the Supreme Court has jurisdiction to deal with civil claims for any amount, this provision that facilitates the transfer of proceedings from the NTCAT to the Supreme Court does not expressly state that the Supreme Court has jurisdiction to deal with and determine matters transferred to it from the NTCAT.

To reduce the likelihood of a matter being transferred in error from the NTCAT to a court, only the president of the NTCAT may transfer a proceeding to the Local Court or the Supreme Court. Further, a recipient court may refuse the transfer of a matter from the NTCAT if the matter is within the jurisdiction of the NTCAT and the recipient court believes that it is not appropriate in the circumstances, despite the transfer order, that it is in the interests of justice for the matter to be transferred to the court.


It should be noted, however, that these reforms do not prevent the splitting of a claim where appropriate, that is, so that part of a claim can be dealt with by the Local or Supreme Court as the case may be, and a small claims component can still be disposed of by NTCAT.


Unit Titles Acts. Currently, certain matters under the
Cullen Bay Marina Act, the Unit Title Schemes Act and the Unit Titles Act, collectively the Unit Titles Acts, may be resolved by having recourse to the small claims jurisdiction of the Local Court. To reduce complexity and facilitate consistency with the recent approach taken to the Termination of Unit Plans and Unit Title Schemes Act, the Justice Legislation Bill amends the Unit Titles Acts to vest the NTCAT with a jurisdiction to hear all disputes under those acts.

Both bills also include transitional provisions for each of the new amended sections.


Essentially, the new law will apply to all proceedings instituted after commencement. Where proceedings have been commenced, but not finally determined before commencement of the amendments, the old regime will apply.


Provisions have been drafted for both the current
Local Court Act and the new, yet to be commenced Local Court Act 2015. It is intended that the new Small Claims Act 2015 commence before the commencement of the Local Court Act 2015, with the exception of sections 18, 25 and 27 of the Justice Legislation Amendment (Small Claims and Other Matters) Act and will commence on a day fixed by the Administrator by gazettal notice. Sections 18, 25 and 27 of this act will commence on the commencement of section 4 of the Local Court Act 2015. It is presently proposed that the Local Court Act 2015 will commence on 1 May 2015.

I am mindful that these reforms are complex and have the potential to affect a wide range of Territorians. I therefore propose that the new Small Claims Act 2015 be reviewed in three years’ time, particularly to assess whether the scope of what encompasses a small claim is working in practice.


These bills represent another step in the complex task of reviewing legislation and, where appropriate, transferring jurisdiction to NTCAT. My ministerial colleagues and I look forward to presenting further bills over time to continue the process of jurisdictional transfers to the NTCAT.


Finally, I would particularly like to thank the Chief Justice, Chief Magistrate and president of NTCAT for their invaluable input in the development of these bills.


I commend the bill to honourable members and I table a copy of the explanatory statement.


Debate adjourned

 


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